Wednesday, 17 of October of 2018

Economics. Explained.  

Consumer Confidence

September 24, 2018

The Conference Board reported that consumer confidence gained 3.4 points in September to 134.7 after having jumped 6.8 points in August to 133.4 which is the highest level of confidence since October 2000 which came in at 135.8.

Lynn Franco, Director of Economic Indicators at the Conference Board said,  “After a considerable improvement in August, consumer confidence increased further in September and hovers at an 18-year high.  The September reading is not far from the all-time high of 144.7 reached in 2000. Consumers’ assessment of current conditions remains extremely favorable, bolstered by a strong economy and robust job growth.”

Confidence data reported by the Conference Board are roughly matched by the University of Michigan’s series on consumer sentiment.   As shown in the chart below, trends in the two series are identical but there can be month-to-month deviations.

The consumer should continue to provide support for overall GDP growth in 2018.  The S&P 500 stock market index, the Russell 2000 and the NASDAQ Composite are all at essentially record high levels.  Home prices continue to climb.  Consumer net worth is at a record high level and rising.  Jobs are rising by about 190 thousand per month.  The unemployment rate is falling slowly. The consumer has little debt.  Interest rates remain low.  In addition, consumers received a cut in income tax rates in 2018.  Clearly, the consumer’s optimism is valid.

We anticipate GDP growth of 3.1% in 2018.

Stephen Slifer

NumberNomics

Charleston, SC


Leave a comment